New nuclear remains in pole position to drive Britain's decarbonisation, says DECC

Energy Minister Andrea Leadsom has today (24 May) underlined the Government's prioritisation of nuclear energy, insisting it remains in "pole position" to drive down Britain's emissions, ahead of other technologies due to its comparatively low-cost to the UK taxpayer.

Energy Minister Andrea Leadsom said contingency plans were in place to protect the UK energy security in the event of sustained Hinkley postponements

Speaking to the Energy and Climate Change Committee (ECCC) during a hearing on the delays to the new nuclear power plant at Hinkley Point, Leadsom said new nuclear provides "more value for consumers”, highlighting that Contract for Different (CfD) rates would be considerably lower than development prices for current offshore wind and tidal projects.

When asked about the Government’s preference for nuclear technology over renewables, the Minister of State for the Department of Energy and Climate Change (DECC) said: “There’s different reasons in each technology. A number of the technologies would be very much more expensive in CfD terms than new nuclear.

"We’ve got to look at the value for consumers - that’s absolutely vital. We also have to look at the dispatchability. For example, hydroelectricity are just as dispatchable, but more expensive.”

‘Non-negotiable’

Concerns have been raised about the uncertain future of the Hinkley Point C nuclear reactor in Somerset, following the repeated delay of a Final Investment Decision (FID), as developer EDF struggles to find partners and secure finance for what would be the first new nuclear power station in the UK for a generation.

Leadsom attempted to alleviate those fears this morning, adding that, while the Government remains “fully confident” that the Hinkley project will go ahead, contingency plans are in place to protect the UK energy security in the event of sustained postponements.

“We’re trying to build a diverse source of energy projects and new nuclear is absolutely a core part of that," Leadsom added. "We’ve always made absolutely clear that energy security is non-negotiable and we do not want our eggs all in one basket. What we’re planning to do is support energy generation in a way that previous Government’s didn’t and should have. We never leave ourselves where one particular project could make or break a system or make the lights go out.

“What we will do is take steps elsewhere should we need to do so to ensure energy security remains secure. Now that could mean through the capacity market, energy storage, offshore wind, demand-side response or greater energy efficiency. All of the different choices that are available to our energy mix are deployed at all times.”

‘Fantastic opportunity’

Some political commentators and green groups have argued that the Hinkley project outcome could potentially affect the UK’s ability to meet international climate change objectives agreed at the recent COP21 summit. Moreover, recent analysis found that scrapping plans for new nuclear reactors at Hinkley and building huge amounts of renewable power instead could save tens of billions of pounds.

But Leadsom rejected claims that a decision to scrap the project would make it impossible for Britain to meet "legally-binding" carbon reduction targets, insisting it would be “perfectly possible” for alternative technologies to sufficiently maintain the decarbonisation process.

“If energy storage is a big success and offshore wind comes forward at the rate and trajectory in terms of price terms falling at the rate we want then it’s perfectly possible that we could meet those carbon reduction targets through a different energy source," she said.

The DECC representative was preceded as a witness at today's Committee hearing by EDF Energy’s chief executive Vincent de Rivaz, who was was grilled about the causes and impacts of the delay to a FID at Hinkley.

The long-anticipated consultation process began on 2 May and will last for at least 60 days, but de Rivaz refused to give a definitive end date. He told MPs that “no project is as well prepared to succeed” as Hinkley, and that he wanted a final decision on the consultation to be taken “the sooner the better”.

Leadsom was appearing in Westminster a day after describing the North Yorkshire fracking approval - the first application approved since 2011 - as a “fantastic opportunity”. "It's good for jobs, the economy and strengthens our energy security," Leadsom said. But the decision was labelled as "bitterly disappointing" and "an absolute travesty" by campaign groups and environmentalists.